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THE RESEARCH OF PROFITABILITY PERSISTENCE IN TURKISH BANKING SECTOR

Alper Aslan () and Omer Iskenderoglu ()

Anadolu University Journal of Social Sciences, 2012, vol. 12, issue 2, 59-68

Abstract: It’s expected that the increasing competition will influence the firms on many ways. Under the competitive environment, firm’s abnormal profits will erode. On this context, profitability of competing firms will not be persistent in the long run and therefore decrease. The hypothesis which proposes that, under competition conditions the profits over the norms will decrease has been tested on many empirical studies. In this study Persistence of Profitability (PP) is researched by Return on Assets (ROA) data on a panel model for 25 surviving Turkish banks for the period 1998 – 2009, by Seemingly Unrelated Regression (SUR) and MADF (Multivariate Augmented Dickey Fuller) tests. The results indicate that the competition affects the profitability and profitability is not persistent in Turkish banks.

Keywords: Competition; Persistence of profit; Turkish Banking System; SUR; MADF. (search for similar items in EconPapers)
JEL-codes: C23 G2 (search for similar items in EconPapers)
Date: 2012
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